Why TikTok and Huawei are in lawmakers' sights
Policymakers in D.C. are targeting a handful of specific Chinese-owned companies as they try to thread the needle between protecting U.S. security and avoiding wider disruption of the two nations' interdependent economies.
The big picture: A new wave of proposals in Congress is turning TikTok, Huawei and other specific companies into proxies in Washington's broader power struggle with Beijing.
What's new: Sen. Josh Hawley will soon introduce a bill to ban federal employees from using TikTok on government devices, he announced at a Wednesday hearing centered on Chinese technological threats.
- During a separate Senate hearing Wednesday on 5G supply chain security, Sen. Roger Wicker said he expects a bill to help small telecom providers ditch Huawei equipment to be signed by President Trump "with some fanfare in the next few days."
- "We face a major security threat from China. This includes our economic security, it includes our military security, and it certainly includes our cybersecurity and our own personal data security," Hawley said at his panel's hearing.
Yes, but: Breaking up with China isn't easy.
- "The reality is, there's no decoupling from China in a macro sense. Our economies are tied together intimately because we rely on the supply of cheap goods from China," Jamil Jaffer, senior vice president at IronNet Cybersecurity and founder of George Mason University's National Security Institute, told Axios. "If we hurt one another, that's going to be painful for everyone."
- Gear from Chinese companies like Huawei and drone maker DJI not only tends to be some of the cheapest on the market, but increasingly it's also top quality.
- That's happened in part because Beijing has supported Chinese companies with cheap financing and direct cash infusions and by long sanctioning infringement of Western intellectual property that can then be built upon, Jaffer said.
Meanwhile: China's enormous middle class has become a major market for U.S. companies like Apple. China, like many other countries, also continues to rely heavily on the U.S. for software, hardware components, and other tech.
- Similarly, the supply chains of many U.S. and European device and equipment makers — including Huawei's global rivals in the 5G supply market, Nokia and Ericsson — extend back to China.
- In comments to the Trump administration as it has ramped up tariffs on China, a host of U.S. companies have declared that the U.S. lacks the infrastructure, from machinery to labor force, to make goods across a wide range of industries.
Tech and telecom firms have become lawmakers' first stop in targeting China for three reasons:
- They're potential security risks. There's no solid public evidence that companies like Huawei or DJI have been spying on Americans for Beijing. But many policymakers and cybersecurity experts argue that deploying their tech widely and opening even the theoretical possibility isn't worth the risk. Meanwhile, companies like TikTok could potentially be tapped for behavioral data to train AI systems.
- They're among China's strongest growth sectors and are increasingly central to modern life. Efforts to cripple and isolate Chinese tech and telecom companies strike at the heart of the country's ability to overtake the U.S. in sheer global economic power.
- They're guilty by association, in the public eye, with China's authoritarianism and surveillance-state tactics.
Between the lines: The U.S. has had its own issues with government surveillance programs, and American tech companies are wrestling with the federal government over its demand for encryption back doors to aid law enforcement.
- Those concerns may be a factor as some countries, including the U.K., shrug off U.S. warnings to avoid building 5G wireless networks with Chinese equipment.
What's next: Coronavirus-driven supply chain disruptions may soon end up teaching American companies more about how to get along without Chinese counterparts than any Congressional mandate.